US:Between the lines: Ford could sell Jag, Land Rover
Between the lines: Ford could sell Jag, Land Rover
Amy Wilson | Automotive News
DETROIT -- Jaguar and Land Rover could be the next Ford units on the block.
The biggest revelation in Ford Motor Co.'s financing package filing last week was the estimate that the automaker would use up $17 billion of cash in the next three years. But other tidbits were tucked into the disclosure:
The sale of Jaguar and Land Rover will be permitted, with provisions. No Jaguar assets were pledged as collateral. The only Land Rover asset pledged is its North American distribution center.
Ford can enter into a merger or consolidation as long as there is no default afterward. Also, Ford Motor must continue as the surviving entity, or the surviving entity must be organized under U.S. laws and assume Ford's obligations.
The sale of the trade names Ford, Lincoln, Mercury and Mustang will not be permitted.
But Ford can sell "other principal trade names," defined as F series and Explorer, with provisions.
Ford can sell Volvo, with provisions. But Volvo assets were fully pledged as collateral, signaling that Ford is likely to keep it.
The sale of up to 51 percent of Ford Motor Credit Co. is permitted, with provisions. Ford Credit also was fully pledged as collateral. Ford executives have said there is no intention to sell it.
Ford pledges not to permit available liquidity to drop below $4 billion. Available liquidity is defined as the sum of unused credit-line money and automotive gross cash.
Ford pledged only 10 of its 33 U.S. plants as collateral. It doesn't make sense to mortgage a plant that might close or go on the auction block, insiders say.
The plants used as collateral are: Kentucky Truck Plant in Louisville, Ky.; Dearborn Truck Plant in Dearborn, Mich.; Michigan Truck Plant in Wayne, Mich.; Kansas City Assembly Plant in Claycomo, Mo.; Chicago Assembly Plant; Sharonville transmission plant in Cincinnati; Lima Engine Plant in Lima, Ohio; Van Dyke transmission plant in Sterling Heights, Mich.; Cleveland Engine Plant No. 1 in Brook Park, Ohio; and Livonia transmission plant in Livonia, Mich.
Although Ford is mortgaging a long list of automotive assets, CFO Don Leclair has said lenders and investors won't have a say in company operations. But the financing package does appear to limit the automaker's flexibility on strategic moves.
That said, loan covenants can always be renegotiated, so the terms probably don't ultimately lock out any options for Ford.
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....